According to the data from BSE, investors made bids for 32,78,93,145 equity shares or 2.02 times compared to 16,20,78,067 equity shares offered for subscription as of 11.50 am.
All the five categories were fully subscribed, the BSE data suggested. The portion for policyholders was subscribed 5.35 times, whereas the employee quota was subscribed close to 4 times.
The quotas for retailers, non-institutional bidders and qualified institutional investors were subscribed 1.71 times, 1.37 times and 1.14 times, respectively.
The issue is entirely an offer for sale of about 22.13 crore equity shares by the government of India, which owns a 100 per cent stake in the insurer, but will offload only a 3.5 per cent stake of the company.
The company is selling its shares in the range of Rs 902-949 apiece but has given a discount of Rs 60 per share to its policyholders. Eligible employees and retail bidders will each get a discount of Rs 45 per share.
The company has reserved 50 per cent of the net issue for the qualified institutional bidders (QIB), whereas non-institutional bidders (NIIs) will get 15 per cent of the issue. The remaining 35 per cent portion has been allocated to retail bidders.
Life Insurance Corporation of India is valued at Rs 6 lakh crore, which is about 1.12 times its embedded value (EV) of Rs 5.4 lakh crore. It is quite reasonable to its listed peers, brokerages said.
The AUM of LIC jumped about 10 per cent to Rs 37,46,404.47 at the end of the financial year 2021 from Rs 34,14,174.57 crore in the previous year. The net profit of the company jumped to Rs 2,974.14 crore from Rs 2,710.48 crore.
For the period ended December 31, 2021, LIC had a total AUM of Rs 40,90,786.78 crore and reported a net profit of Rs 1,715.31 crore.
Majority of the brokerages are bullish on the IPO of LIC and have suggested subscribing to it. However, some have raised concerns over its declining market share and the overhang of future stake sales by the government.
“We believe LIC’s listing will broaden the investable universe and further raise the sector’s relevance in investors’ portfolios,” said global brokerage Jefferies.
“It will also help investors to better track sector dynamics as LIC disclosures become frequent. LIC has recalibrated its par and non-par products ahead of the listing,” it added.
LIC will likely strengthen its omnichannel distribution network for individual products and increase its productivity, said Ashika Stock Broking with a ‘subscribe’ rating on the issue.
“Clearly there’s room for every player in the industry to grow without adopting cannibalism. At the upper price band of Rs 949, the issue is valued at a significant discount to private sector valuations,” he added.
LIC operates through 2048 branches, 113 divisional offices, and 1,554 Satellite Offices. It operates globally including in countries like Fiji, Mauritius, Bangladesh, Nepal, Singapore, Sri Lanka, UAE, Bahrain, Qatar, Kuwait and the United Kingdom.
LIC has garnered over Rs 5,627 crore from the anchor investors by allotting them 5.92 crore shares at Rs 949 per share, the insurer said in a filing to exchanges. Out of them, 4.2 crore shares were allocated to 15 domestic mutual funds.
